DOL Issues Temporary Rule Under Families First Coronavirus Response Act

The U.S. Department of Labor released a temporary rule yesterday to guide employers and workers in navigating the Families First Coronavirus Response Act (FFCRA). The FFCRA went into effect on April 1, 2020, and provides approximately 61 million workers with emergency paid sick leave of up to 80 hours and extended family leave of up to 12 weeks. By issuing a temporary rule, the DOL dispensed with the notice and comment period that generally precedes most rulemaking, citing “good cause.” The rule is effective April 1, 2020 through December 31, 2020, and applies to employers with fewer than 500 employees.

While many of the issues covered by the new rule had been previously addressed by the DOL in its Question and Answer guidance published and updated in the weeks since March 18, the rule provided additional information and guidance on some key issues.

The basic tenets of the FFCRA are unchanged. As discussed in prior First Alert publications on March 18, 2020 and March 24, 2020, the FFCRA provides eligible employees up to 80 hours of paid sick leave if they cannot work or telework because:

1. The employee is subject to a federal, state or local quarantine or isolation order related to COVID–19.
2. The employee has been advised by a healthcare provider to self-quarantine due to concerns related to COVID–19.
3. The employee is experiencing symptoms of COVID–19 and seeking a medical diagnosis.
4. The employee is caring for an individual who is subject to an order as described in subparagraph (1) or has been advised as described in paragraph (2).
5. The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the childcare provider of such son or daughter is unavailable, due to COVID–19 precautions.
6. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

Sick leave under the first three reasons is paid at the employee’s regular rate and sick leave under the latter three reasons is paid at 2/3 of the employee’s regular rate.

Expanded family leave is available under the FFCRA for up to 12 weeks for any eligible employee who is unable to work or telework due to a need to care for a son or daughter whose school or place of care has closed or whose care provider is unavailable due to COVID-19. The first two weeks of expanded family leave are unpaid, unless the employee is eligible for and elects to use emergency paid sick leave, and weeks 3-12 are paid at 2/3 of an employee’s regular rate.

Joint and Integrated Employers

The DOL confirmed that to determine its total number of employees – and, consequently, whether an employer is covered by the FFCRA – an employer must include in its count (a) full-time and part-time employees in the U.S. or any territory or possession, (b) any employee currently on leave of absence, (c) temporary employees jointly employed with a placement agency, and (d) day laborers supplied by a placement agency. Many employers have questioned how to count employees who may be jointly employed by another entity or whether employees of affiliated entities should be counted.

In both the temporary rule as well as an update to the DOL’s question and answer guidance on March 28, the DOL clarified that employers may use either the joint employer test under the Fair Labor Standards Act (FLSA) or the Integrated Employer test under the Family and Medical Leave Act (FMLA) to count employees toward the 500-employee threshold for coverage under the FFCRA and corresponding duty to provide emergency paid sick leave and expanded family leave.

Joint Employer Test

The DOL may consider separate entities to be a joint employer under the FLSA if the entities each exercise some control over the work or working conditions of an employee. Separate entities may be considered a joint employer of the same employee where: (1) an employee performs work for one employer that simultaneously benefits two or more employers and where the potential joint employer is directly or indirectly exercising control over the terms and conditions of the employee’s work, or (2) an employee works for two or more employers at different times during the workweek but there are certain arrangements between the employers and shared control of the employee. Evaluating joint employer status is a fact-intensive, case-by-case analysis, and classification as a joint employer may have wide-ranging implications in other aspects of an employer’s business operations.

Integrated Employer Test

Integrated employers with a total of 500 or more employees are not covered by the FFCRA. Under the FMLA’s integrated employer test, employers need to consider four factors to determine if employees of separate but related entities are required to be aggregated:

1. Common management;
2. Interrelation between operations;
3.  Centralized control of labor relations and personnel; and
4. Degree of common ownership/financial control. 

No single factor is determinative, and the entire relationship between the entities must be reviewed in its totality under this test. Similar to the joint employer analysis, each entity should evaluate these factors on a case-by-case basis.

Small Employer Exemption

Small employers with fewer than 50 employees may be exempt from providing paid sick leave and expanded family leave where the imposition of these requirements “would jeopardize the viability of the business as a going concern.” The DOL specified a small employer is entitled to this exemption in three circumstances where an authorized officer of the business has determined that:

1. The leave requested would result in the small employer’s “expenses and financial obligations exceeding business revenues and cause the small business to cease operating at a minimal capacity;”
2. The absence of the employee requesting the leave “would entail a substantial risk to the financial health of operational capabilities of the business because of their specialized skills, knowledge of the business or responsibilities;” or
3. There are not sufficient workers able, willing or qualified, and available at the time and place needed to perform the services provided by the employee requesting leave.

To elect this exemption, a small employer must document that a determination has been made in compliance with the above criteria and retain that documentation for four years but does not require submission of any documents to the DOL.

Leave to Care for Son or Daughter

The FFCRA provides expanded family leave for up 12 weeks to care for a son or daughter if the school or place of care has been closed or the childcare provider is unavailable due to COVID-19. The first two weeks of expanded family leave are unpaid and can be supplemented by emergency paid sick leave, if elected by the employee. An employer cannot force the employee to cover the first two weeks of expanded family leave with emergency paid sick leave.

The tentative rule confirmed that “son or daughter” as used in the statute is broader than its colloquial meaning and includes a “biological, adopted, or foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis” as well as any individual over the age of 18 “who is incapable of self-care because of a mental or physical disability.”

The DOL further clarified that a covered employer must offer leave to an employee to care for a child whose regular child care is unavailable due to COVID-19, even if the child’s regular care provider is an unlicensed family member or friend who regularly cares for the employee’s child. The tentative rule specifies, however, that expanded family leave may only be taken to care for a child if “no other suitable person” is available to care for the child during the period of the requested leave. While this may appear to place some rigor around the certification process for an employee requesting expanded family leave, the rule requires only that the employee make a “representation” as to the fact that no other suitable person will be caring for the child during the leave period.

Intermittent Leave

Intermittent expanded family leave is permitted if the employer consents. Similarly, emergency paid sick leave can be taken intermittently if used for the care of a child whose school is closed or care unavailable due to COVID-19, if the employer consents.

Conversely, the tentative rule clarifies that emergency paid sick leave must be taken fully and continuously for any qualifying reason other than to care for a child pursuant to the statute.

Leave Due to a Quarantine or Isolation Order

Employees may seek emergency paid sick leave because they are subject to a quarantine or isolation order or because they are caring for an individual under a quarantine or isolation order. The tentative rule specifies that a “quarantine or isolation order” includes quarantine, isolation, containment, shelter-in-place, or stay-at-home orders issued by any federal, state or local government authority. The rule also clarifies that a federal, state or local government advisory to a category of citizens to isolate themselves will qualify an employee for paid sick leave if they are unable to work or telework.

Notably, the DOL specifically articulated that an employee may not take paid sick leave due to a quarantine or isolation order unless the employer has work available for the employee. A business that is rendered inoperable due to a quarantine or isolation order does not have to provide paid sick leave under the FFCRA to employees unable to work during the period of the order. Similarly, employees terminated or furloughed do not have the right to paid sick leave because work is not otherwise available to the employee from the employer.

The DOL further clarified that care for an individual subject to a quarantine or isolation order, as permitted for under emergency paid sick leave, specifically excludes persons with whom the employee has no personal relationship and includes only the following individuals:

1. Employee’s immediate family member;
2. A person who regularly resides in the employee’s home; or
3. A person with whom the employee has a relationship that creates an expectation that the employee would care for that person.

Notice and Documentation Requirements

The tentative rule specifies documentation requirements for both employees seeking leave and employers administering the new rules. In all cases, an employee must provide notice of the need for leave no later than following the first workday (or partial workday) for which the employee takes leave. Notice related to care of a child is required as soon as practicable if it is foreseeable and, in any event, no later than after the first workday (or partial workday) of leave. Employees failing to comply with the notice requirements under the DOL’s tentative rule must be alerted to such failure and given an opportunity to cure.

The DOL has not published a certification form for an employee’s request for leave of either type. The DOL’s tentative rule does specify that an employee seeking either emergency paid sick leave or expanded family leave must provide to the employer:

1. The employee’s name;
2. The dates for which leave is requested;
3. The qualifying reason for leave; and
4. An oral or written statement that the employee is unable to work because of a qualified reason for leave.

For a request for paid sick leave (other than to care for a child), the employee also may be required to provide to the employer, as applicable (a) the name of the government entity that issued a quarantine or isolation order (related to the employee or the individual that the employee is caring for) or (b) the name of the healthcare provider who advised the employee or individual to which employee is providing care to self-quarantine due to COVID-19 concerns.

In support of a request for paid sick leave or expanded family leave to care for a child whose school is closed or care is unavailable due to COVID-19, an employee is required to provide:

1. The name of the child being cared for;
2. The name of the school, daycare, or childcare provider that has closed or become unavailable; and
3. A representation that no other suitable person will be caring for the child during the requested leave.

Employers may deny leave to any employee who fails to provide the required information. For oral statements related to leave, employers are directed to document and retain the information provided. Employers must retain for four years all records related to requests for leave by an employee under FFCRA.

Enforcement

The temporary rule makes unlawful any discrimination, retaliation and interference with rights under the FFCRA. Additionally, failure to pay the Paid Sick Leave under FFCRA is deemed a failure to pay the minimum wage under the FLSA. The remedies for violating the FFCRA include recovery of unpaid minimum wage, unpaid overtime, liquidated damages, and recovery of attorney’s fees. Notably, while the mechanisms for enforcement of the FFCRA are similar to those under the FLSA, including direct cause of action, collective actions, and agency action, individuals may not file a private cause of action alleging violation of the expanded family leave provisions against an employer who is not otherwise subject to the FMLA in the absence of the FFCRA expansion.

Calfee invites you to visit our COVID-19 Resource Center containing First Alerts to help guide you through the challenges faced by individuals and organizations as a result of the novel coronavirus outbreak. We are committed to helping you meet the diverse and complex challenges and navigate the disruptions caused by this pandemic. Please check the COVID-19 Resource Center regularly for the latest updates, or subscribe to receive the most up-to-date Alerts sent directly to your email inbox. Please whitelist info@calfee.com and news@calfee.com to ensure these emails are delivered directly your inbox and not your spam filter.